Tuesday, July 21, 2009

Microsoft FY09Q4 Results

This is it. The wrap up of FY09, coming fresh to us Thursday July 23rd. I'll put this up a bit early in case there are any initial questions, thoughts, or insights regarding how FY09 is closing.

Some of my favorite places to track insights and opinions on MSFT quarterly results:

Topics I'm interested in:

  • Description of efficiency so far and an enumeration of which groups are going to get Sinofsky'd.
  • Assessment of further financial risk at the hands of the EU Commission.
  • Oh, any more layoffs? If not, it would be wise for the SLT - for the sake of employee morale - to close the door on this now.

Given how negative Ballmer has been about the economic reset, I can't imagine any rosy picture painting just yet, even if Intel looks like it has bottomed out and Apple is frantically trying to create as many iPhones as it possibly can.

Sunday, July 12, 2009

Microsoft Has Turned The Corner

I've got to say: in my opinion, Microsoft has turned The Corner.

You know The Corner.

The one that gets us off of pothole ridden Vista Avenue (one street over from Lincoln in Blue Velvet). The Corner that requires Microsoft to shed some of the fat it has layered on recently just to make the turn without flipping. The one that requires a bit of humility for past failings (the aforementioned Vista, Xbox losses & red-ring, Zune's market performance so far, WinMo asleep at the wheel, no coherent brand strategy, search lagging behind for so long, the abandonment of IE after IE6, a confused developer story, a bungled Yahoo! acquisition attempt, etc etc etc).

The Corner that perhaps doesn't get us out of the bad neighborhood, but is at least pointing us in the right direction. What has helped make the turn?

  • Windows 7
  • Bing
  • Silverlight
  • IE EU chutzpah
  • ...and award worthy, coherent ads that aren't a demonstration of how best to destroy millions of dollars quickly.

Redemption takes a while. Time is needed to allow perception to change and to re-earn trust and respect. Once Microsoft was the scrappy underdog playing catch-up against many competitors. Later Microsoft was the dominating OS and application suite, so drunk and arrogant on its own power (pre-monopoly designation) that it made some truly dumb, strong-armed moves (and even worse, did sloppy "nuh-uh!" cover-up maneuvers). After that, Microsoft went from getting beat-up by the US government to the dot-com bust to the development of Vista, reset after the huge effort of XP SP2. The Evil Empire became The Bungler, hatred turning to scorn and frowning distaste. And the EU hurried over to slip in a few kicks to the wallet.

While all of that could have been avoided with competent senior leadership, it at least served as a hard enough whack to the side of the head that even our mediocre leadership took action to aright the ship.

Now we have the potential to start shaking this off and achieving solid, if not stellar, results.

This is happening, too, while the shine on Google is dulling. Rather than pulling an Apple on us anymore, Google has picked up the nasty habit of pre-announcing technology. Guys, you stole the wrong playbook. And, uh, we don't want it back. Plus the government's gaze has moved from the fallen-working-on-redemption of Microsoft to the obvious domination of Google in search and information strong-arming. A dose of the medicine Google's now getting:

Anyway. Let us enjoy this success of Microsoft turning The Corner, all while being a wee bit smaller and more efficient. 5,000 jobs eliminated so far and a declaration from Ballmer that efficiency is his key focus right now. Wall Street likes how that blood in the water tastes so far.

I'm going to start my whole "and we can cut a whole lot more positions" screed in a second. But first a moment to reflect on the flesh and blood people caught up in the layoff mess we've gone through so far. There is certainly a sobering perspective on this within the abundant comment stream of the last post.

It's not their fault they were part of the layoff. It's not their fault that their position was considered part of the inefficient part of the company that was eliminated. I certainly don't blame anyone for wanting to work for Microsoft. Large parts of Microsoft are magical, exhilarating places to be. In its bones, Microsoft is a great company with amazing potential. It's just turning The Corner and directing itself to where it can focus on efficient, lean-mean, profit making products that engage and delight Microsoft customers.

At Microsoft a lot more positions still need to go to achieve efficiency and focus. 15,000 more is my magic number. It's not personal. But to achieve efficiency and resolution of what to focus on with determination, we need a whole lot less people and to publicly admit there are opportunities we will focus on and others we are okay walking away from. ("That's right, Adobe: you can charge as much as you flipping want for your Photoshop line of software.")

For efficient product development: Yahoo!'s Carol Bartz has a good point when she swears like a sailor over having way too many program managers vs. actual developers (overloaded with one program manager for every three developers). <<edit edit edit - this went quickly into the weeds - let me sum up some quick thoughts>> Looking across groups, I still see exceptionally inefficient use of broad, front-loaded thinking and design locked into a 1970s waterfall model that leads to reality and focus coming way too late and a bunch of frantic, mediocre consensus driven crap floating like chunks into an end product. Kaizen. Kaizen. Kaizen. Efficiency is not going to happen as long as we continue rewarding people for this status quo. Shedding a respectable chunk of the company would bring an exceptional amount of upfront focus to our teams and result in high-quality features end-to-end, vs. what we see in misshapen compromise that we can fit in.

Microsoft has turned The Corner. But our car's suspension is still wobbling from the load we're carrying, and while some fine spots of leadership has gotten us around this bend, it doesn't take much for the remaining mediocre leadership to assume that the pressure is off and to get their grubby hands on the wheel and start turning us back towards Vista Avenue. The job isn't done. It's just beginning. We iterate again.

(Oh, and hey, here's a question for you: if you could create a new Microsoft leader based on the best attributes of our current leaders, what would you create? For instance, I'd start by combining the efficient layer-busting profit focused philosophy of new President Steven Sinofsky with the campus design skills of President Robbie Bach. Ideas?)

Administrivia: to subscribe to all comments here, use the following: http://minimsft.blogspot.com/feeds/comments/default . While I enjoy providing the freedom of unmoderated comments over in The Cutting Room Floor, I had to turn off anonymous comments for the time being. You can still post unmoderated comments, you'll just need to provide a Blogger ID / OpenID.

CRF: unmoderated comment thread: Microsoft Has Turned The Corner (plus a snippet of what I deleted from this post).

-- Comments